How UAE tenants can avoid being cheated



DUBAI // To avoid falling for a similar scam, experts recommend renters insist on seeing the title deed as well as evidence that the lease agreement has been registered with the Dubai Land Department.

Obtaining proof that an estate agent is registered with the Real Estate Regulatory Agency (Rera), is also vital, said Alexis Waller, a partner at the law firm Clyde & Co.

"When a tenant is taking on a lease, they should always ask for a copy of evidence of the landlord's ownership of the premises. If the landlord owns the premises, he should have a title deed issued by the Dubai Land Department to show this.

"If the landlord himself does not own the premises and instead leases from a head landlord who owns the premises, a copy of the lease should be disclosed, along with the head landlord's title deed. The lease should be carefully checked to see if subleasing is permitted as this is often restricted in leases."

As per Dubai law, agents must be registered with Rera. The tenants should ask for registration details of the agent, and check them on the Rera website. The operating licence of the estate agency can also be cross-checked to ensure it is licenced to work in property, Ms Waller said.

In March 2010, Rera announced that all rental contracts should be registered at the Ejari - "my rent" - online portal, www.ejari.ae, in order to protect both parties in event of a dispute, and to ensure the same property was not rented out twice.

In the Shamyana case, if the lease agreement was registered under the Ejari scheme, the illegal subletting may have been detected earlier since Shamyana would not have been able to present the ownership proof required.

Ms Waller advised residents to confirm the timeframe when the lease would be registered under Ejari after being signed.

"Market practice is for landlords to undertake this but for the tenant to pay the fee of Dh190," she said. "Registration is required under the law but the law does not stipulate who is responsible for doing it. Tenants can register if the landlord fails to do so, but cannot register on-line, which many agents and landlords are set up for. Tenants need to attend the allocated typing centres to register their tenancy contracts."

All registered agents are listed on www.dubailand.gov.ae.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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